9911796707
TMI Blog2024 (7) TMI 1328X X X X Extracts X X X X X X X X Extracts X X X X ..... management not to disclose the giving of discount to him and therefore, he has mentioned cash instead of discount in his Whatsapp message and he has paid only Rs.15 lakhs cash. AO observed that Dilip Kumar as mentioned in the seized material of 15 L pd to V.S . AO decoded 15LRs. Paid to Vishwanath Shetty in his statement. However, Dilip Kumar has not mentioned to the question No. 14 to sworn statement dated 11.8.2021 that Rs.15 lakhs was paid to Vishwanath Shetty. As noted that nowhere he has mentioned in his answer that Rs.15 lakhs was paid to Vishwanath Shetty and he also said in his answer to next question that he has not paid any attention of whatsapp message of Uday Shetty, father of Utsav Shetty. However, it is to be noted that the amount of Rs.15 lakhs is not encircled in the seized material. Being so, it cannot be said that the said amount of Rs.15 lakhs has been paid. Collection of unaccounted fees - addition made by the AO is based on unsubstantiated loose sheets and jottings or Excel sheets - Statements recorded u/s 132 (4) solely cannot constitute as incriminating material so as to make these additions. Addition made by the AO is based on unsubstantiated loose sheets an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered all the material on record and also the statement of the parties as discussed in the earlier paragraphs. We are of the opinion that the department cannot rely on those statements, more so when it was confronted to the assessee s employees during cross-examination, they have denied the collection of unaccounted fees. The department failed to collect proper information from any source corroborating collection of unaccounted fees, except un-corroborating entries in the loose sheets. All attempts for corroboration failed. There is nothing to suggest that the trust has deviated from the objects for which registration was granted and not applied the funds for its objects. No evidence was brought on record to show that amount of alleged unaccounted fees which have been collected and misused by the assessee or by any interested persons. There is no instance of recovery of any assets commensurate with the alleged estimated unaccounted collection of unaccounted fees as found by the AO. The activities of the trust are genuine. There is no allegation by the lower authorities that activities of the trust are not genuine. Also there was no allegation that the activities of the trust ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examination. The revenue authorities cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion, however strong, cannot take place the material in place of evidence of the AO. AO should act in a judicial manner, proceed in a judicial spirit and come to the judicial conclusions. AO is required to act fairly as a reasonable person, not arbitrarily and capriciously. The assessment u/s. 153A of the Act should have been supported by adequate material and it should stand on its own leg. The AO without examining the students / parents who have paid the unaccounted fees cannot come to the conclusion that the assessee has received unaccounted fees. The basis for donation is notebook / loose sheet. This notebook or loose sheets found during the course of search is only circumstantial evidence and not full proof evidence to sustain the addition. No addition can be made in the absence of any corroborative material. If it is circumstantial evidence in the form of loose sheets and notebook, it is not sufficient to come to the conclusion that there is conclusive evidence to hold that assessee has collected unaccounted fees. The notes in the diary/loose sheets are require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Excel sheets taken from the computer having no signature or authorization from the assessee s side. These are unsubstantiated documents and there is nothing to suggest any undisclosed assets of assessee found during the course of search. More so, search action not resulted in recovery of any undisclosed assets in the form of landed property, building, investments, money, bullion, jewellery or any kind of movable or immovable assets. As also noted that on cross examination of the employees, they have denied the receipt of the unaccounted fees. Further, out of 43 students alleged to have been paid unaccounted fees, 35 students denied the same in affidavit, 5 denied in their sworn statement and whereabouts of 3 students were not known. No efforts has been done to find out their whereabouts. Some of the statements have been recorded under section 131 by the authorized officer subsequent to completion of search and these statements cannot be considered as conclusive evidence in view of the below mentioned CBDT Circular. AO has made the addition only on the basis of sworn statements of the various parties backed by unsubstantiated loose slips/excel sheets, which cannot be basis for add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions and weight of evidence of the facts and circumstances of the case 2. Ld. CIT (A) has erred in confirming the addition of Rs.6,61,00,000/- made by the AO without appreciating the facts and circumstances of the case 3. The Ld. CIT (A) has red in confirming the addition of Rs.6,61 made by the AO solely based on the statement recorded by the employees of the Appellant Trust. 4. The Ld. CIT (A) has erred in confirming the addition of Rs.6,61,00,000/- made by the AO solely based on the statement recorded by the employees from whom the search team has not impounded any books of account, documents, money, bullions, jewellery or any incriminating documents. 5. Ld. CIT (A) has erred in confirming the addition of Rs.6,61,00,000/- made by the AO on the basis of some dumb loose sheets said to have been found in the searched premises during the course of search without appreciating the fact the alleged dumb loose sheets cannot constitute books of account. 6. Ld. CIT (A) has erred in confirming the addition of Rs.6,61,00,000/- made by the AO on the basis of dumb loose sheets which were not in the nature of incriminating documents 7. Ld. CIT (A) has erred in confirming the addition of Rs.6,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which contained the details of students, course name, balance fee, date of the payment etc. The same were found and seized during the course of search proceedings at the premises OF A.J. Institute of Medical Science and Research centre. 2.4 Since Mr. Ravindra left the job, one Mr. Dilip Kumar was appointed in his place and he continued to carry out the same job done earlier by Mr. Ravindra. During the course of the search proceeding, Mr. Dilip Kumar confirmed that loose excel sheets were maintained by him which were found and seized. Mr. Dilip has written fee receipt transactions on the same sheet in his own handwriting. 2.5 The AO observed that Mr. Dilip Kumar maintained the record of the due fee of the students pursuing their study in medical and dental courses and for those who have gotten admission in management and NRI quota in the college. That the amounts received through banking channel were scribbled down by Mr. Dilip Kumar in pen in front of the particular row which contained the details of the student and there were encircling made in pencil also in some cases. 2.6 During the course of search proceedings, a sworn statement dated 20.02.2021 of Mr. Dilip Kumar was recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exact reasons for retraction and without substantiating what was specifically false in the statement record during the search. 2.12 In the later statements, Mr. Vishwanath Shetty claimed that the amount mentioned on the seized materials were maintained for follow-up purposes and that these loose sheets had the data related to cash collected by the agents. He also mentioned that the students paid cash to agents through whom they got admission and claimed that he had not received the said cash. 2.13 The AO observed that the aforesaid claims were contradictory, and that the role of agents were limited to introducing students to the college and carrying out all the documentation and procedure for admission, and they received commission for the same. The agent had no role post the admission of the students. Therefore, the AO asserted it is highly unlikely that the agents would have received the cash from the students as claimed by Mr. Vishwanath Shetty and no evidence for the claims made were found during the search. Mr. Vishwanath Shetty also claimed that the handwritten figures in the seized materials were nothing but discounts given to students. The AO countered these arguments with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Mr. Vishwanath Shetty. During the cross examinations, both Mr. Dilip Kumar and Mr. Vishwanath Shetty claimed that cash was not collected for admission process to MBBS and MD seats and instead, concession was given to students due to covid and others reasons by the management of the trust. It was crystal clear that Mr. Mr. Vishwanath Shetty and Mr. Dilip Kumar had turned hostile by changing their stance and deposition on oath. 2.19 The AO pointed out that even there were contradictions in the statements dated 29.09.2021 and 17.08.2021 deposed by Mr. Vishwanath Shetty and Mr. Dilip Kumar and he specified certain instances to prove the same. Further, the AO stated that the retracting statements given were nothing but an afterthought to cover up the cash received by them from the students. The AO referred to and relied upon many judicial pronouncements to support his action that the statements recorded u/s 132 (4) and 131 of the Act have great evidentiary value and cannot be denied in a summary manner. Hence, the unaccounted cash receipts of Rs.6,61,00,000/- was treated as income of the assessee. 2.20 Further, it is seen from the assessment order that the AO claimed that incriminati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of the Trustee which is in contravention of the provision of section 13 (1) (c), and following the jurisdictional High court's decision mentioned above, the AO held that the amount of Rs. 7,57,50,346/- was to be taxed in the hands of the assessee trust at the maximum marginal rate under section (13) (1) (c) r.w.s 164. 2.26 On analyzing the corroborating evidences found during the search, the AO established that unaccounted cash receipts from students aggregated to Rs. 6,61,00,000/- during F.Y 2020-21 and these receipts were not accounted by the assessee Trust. 2.27 Against this assessee went in appeal before ld. CIT (A) who has confirmed the order of ld. AO with regard to addition of Rs. 6,61,00,000/- and given a partial relief. Once again, the assessee is in appeal before us. 3. First, ground Nos.1 to 7 are with regard to addition of Rs.6.61 Crores on the basis of statement recorded u/s 132 (4) of the Act supported by unsubstantiated documents found during the course of search. 3.1 The ld. A.R. submitted that the Learned CIT (A) erred by acknowledging the addition of Rs. 6.61 crores made by the learned AO solely on the basis of sworn statement and loose sheets found in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormality and not regularly. 3.2 The ld. A.R. for the assessee further submitted regarding Covid that Vishwanath Shetty was suffering from Covid from 11-09-2020 to 12-11-2020. The medical certificates are already been submitted in assesee s Paper book dtd 23-04-2024 in SL No.3 page 95-98. Amount mentioned during this period is Rs. 1,75,50,000 which amounts to around 38% of Rs. 4,57,00,000. When he was in ICU etc how can he take cash. But initially on 20-02-2021 in his statement on oath said to be taken under section 132 (4) of the act, he stated he has received cash, Also stated in Page 58 of the assessment order (In his answer to question No 5), that Mr. Vishwanath Shetty was suffering from Covid-19 for the above period. No corroborative evidence in the seized material: in Para 13 of page 46 of the Assessment Order, the learned Assessing Officer has stated as follows: There are cases where the search team could not find the other corroborating evidence like cheque leaves, the records maintained by the Mr. Dilip Kumar except the data maintained in loose sheet folder marked as A/AJIMS/02 . 3.3 Thus, he submitted that the learned Assessing Officer himself has stated that there is no c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said whatsapp message was shown to Mr. Vishwanath Shetty. Mr. Viswanath Shetty has the said amount must have been collected by agent. Affidavit for not giving cash in the case of 33 students. In addition, other students / parents gave sworn statement before the assessing officer, during the assessment proceedings. Section31 of the Indian Evidence Act 1872 states that statements/admissions are not conclusive proof. He relied on various precedents which are kept on record. 4. The ld. D.R. submitted that the above issue based on the seized materials found during the search and the statements recorded from various persons at that time. The AO brought out the relevant evidences recovered from the search premises and analyzed these documents in detail along with the statements recorded from Mr. Dilip Kumar and Mr. Vishwanath Shetty. The seized materials, which are the primary evidences, are unambiguously clear in incriminating the appellant on the collection of unaccounted cash receipts from the students. 4.1 The seized documents clearly showed the name of the students, year of admission, batch, the course admitted to, total fees to be paid, dates, the amount paid in RTGS/other bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities and prayed that the addition of Rs. 6,61,00,000/was collected by the appellant from the students as unaccounted cash receipts in A.Y 2021-22 to be sustained. 4.4 Further, she relied on the following case laws: (i) Judgement of Hon ble Supreme Court of India in the case of Video Master Vs. JCIT reported in (2015) 378 ITR 374 (SC), wherein held as under: A search and seizure operation was carried on at premises of the assessee firm and others where in partner of the assessee disclosed certain undisclosed income. Accordingly, an addition was made to the income of the assessee. The Tribunal held that statement made by partner could be used as evidence and accordingly upheld the assessment order. The High Court dismissed appeal of the assessee. Held that it is not possible to say that this is a case of no evidence at all inasmuch as evidence in the form of the statement made by the assessee himself and other corroborative material are there on record. (ii) Judgement of Hon ble High Court of Kerala in the case of CIT, Kozhikode Vs. O. Abdul Razak reported in (2013) 350 ITR 71 (Kerala) where held as follows: IT: As self-serving retraction, without anything more cannot dispel state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court that the assessee cannot be permitted to take advantage of his own illegal acts, that it was his duty to place all facts truthfully before the assessing authority, that if he fails to do his duty She cannot be allowed to say that assessing authority failed to establish suppression of income, that the facts are within his personal knowledge and therefore it was the burden of the assessee to prove that there was no suppression. Thirdly, the Tribunal has stated that there was no corroborative material to substantiate the contents of the loose papers found during the search. We are not impressed by this reason at all. The papers are not denied or disputed by the assessee. The CIT (Appeals) has found that the partners of the assessee firm had admitted to the practice of suppressing the profits. The papers themselves show two different rates, one higher and the other lower and on comparison with the sale bills it has been found that the sale bills show the lower rate and these findings have not been denied by the assessee. The Tribunal, therefore, erred in looking for some other corroboration to substantiate the contents of the loose papers, overlooking that the loose papers need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 12 to 12.6 of the assessment order Rs.4,57,50,000/- 3. Unaccounted cash received from students as per para 13 to 13.2 of the assessment order Rs.1,23,50,000/- 4. Unaccounted cash received from students as per para 14 of the assessment order Rs.30,00,000/- Total Rs. 6,61,00,000/- 5.1 The summary of the seized material relied for making above additions and corresponding statements from the various parties are as follows: SL.No. Name of Student Batch Affidavit or Sworn Statement given by Students/ Parents Reference in Assessment Order/ Paper book Seized Material Extract Reference in Paper book Page No. of the paper book No.3 1 BH Gyan 2019-20 Sworn Statement Page No 71 72 of Assessment order Page No 113 of Paper book No 1 01-02 2 Man Shetty Somanath Sudarshan 2019-20 Not able to contact Page No 114 of Paper book No 1 03 3 Utsav Shetty 2019-20 Sworn Statement from Mr. Uday Shetty (Father of Utsav Shetty) Page No 73 75 of Assessment order Page No 115-116 of Paper book No 1 04-05 4 Kunwar Rahihikmat 2017-18 Affidavit Assessee s Paper book No. 1 (Page No. 72 73). Page No 116 of Paper book No 1 06 5 Lekha Bhat 2017- 18 Affidavit Assessee s Paper book No. 1 (Page No. 74). Page No 117 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No 1 31 26 Rishab Jain 2019- 20 Sworn Statement Page No 65 66 of Assessment order Page No 137-138 of Paper book No 1 32 27 Dr Aishwarya R 2019- 20 Affidavit Assessee s Paper book No. 1 (Page No. 43 44). Page No 138-139 of Paper book No 2 33 28 Nikitha Nagesh 2019- 20 Affidavit Assessee s Paper book No. 1 (Page No. 57 58). Page No 139-140 of Paper book No 1 34 29 Chidrawaj Yogendra Prakash 2019- 20 Affidavit Assessee s Paper book No. 1 (Page No. 49 50). Page No 140 of Paper book No 1 35 30 Tejasvi Mathur 2019- 20 Affidavit Assessee s Paper book No. 1 (Page No. 65). Page No 141 of Paper book No 1 36 31 Meenal Singh Rajput 2019- 20 Affidavit Assessee s Paper book No. 1 (Page No. 75 76). Page No 141-142 of Paper book No 1 37 32 Arjun Venugopal 2019- 20 Affidavit Assessee s Paper book No. 1 (Page No. 41 42). Page No 142-143 of Paper book No 1 38 33 Adya P Shenoy 2017- 18 Affidavit Assessee s Paper book No. 1 (Page No. 31 32). Page No 143 of Paper book No 1 39 34 Rasmitha R 2017- 18 Affidavit Assessee s Paper book No. 1 (Page No. 82 83). Page No 143-144 of Paper book No. 1 40 35 Saiyed Maria Imtiyaz 2017- 18 Affidavit Assessee s Paper book No. 1 (Page No. 85 86). Page No 144 of Paper bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and remaining fees Rs.10,00,000 was paid through RTGS. He has also clarified that management told not to disclose about discount to any employees, therefore he has worded cash instead of discount in his whatsapp message and he has said Rs, 15,00,000 paid in cash. Observation of AO in Para 11.4(1), 11.4(2) 11.4(3) of Page No.38 to 40 of the assessment order Utsav Shetty has to pay Rs. 25 lakh each for 2020,2021 2022. For the year 2020, he has paid 10lakhs through NEFT on 01-02-2021. Mr. Dilip Kumar has mentioned in pencil that 15L pd to V.S which he himself decoded as Rs. 15 lakhs are paid to Vishwanath Shetty in his statement. However, it may be noted that Mr. Dilip Kumar has not mentioned answer to question No. 14 of sworn statement dated 11-08-2021 that Rs.15,00,000 was paid to Vishwanath Shetty. His answer to question No. 14 of the sworn statement dated 11-08-2021 is as follows: 15 denotes amount was cleared to Vishwanath Shetty (V.S) by the students then I called them. It may be noted that nowhere he has mentioned in his answer that Rs. 15,00,000 was paid to Vishwanath Shetty and he has also said in his answer to next question that he has not paid any attention to whatsapp mess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said amount of Rs.15 lakhs has been paid. II SECOND ADDITION OF Rs. 4,57,00,000/- The above addition was made in respect of following students: Now we will examine the seized material related to each of this student. Kunwar Rahihikmat 9 Kunwar Rahihikmat 9825070452 (F) 8128101974 (M) 7984086102 (S) Our Remarks for above loose sheet SL No Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 Page no Category-2 1 Kunwar Rahihikmat MBBS 2017-18 12,50,000 Fees due amount not mentioned. Payment details also not given so it cannot be considered as cash payment. 432 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 12-Nov kunwar Rahi Hikmat MBBS 17-18 12,50,000 8 Observation of AO: In loose sheet A/AJIMS/06 no amount is written where as Mr. Vishwanath Shetty has written Rs.12,50,000. There is mismatch no clarification/ details obtained from Mr. Dilip Mr. Vishwanath Shetty. In the Students Affidavit is part of Assessee s Paper book No. 1 (Page No. 72 73), Mr. Kunwar Rahi Hikmat mentioned he has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails given here which is given in Page No. 362, which means this Rs. 15,00,000 is part of the above Rs.25,00,000 which is already been discussed. Notings as per A/AJIMS/02 Written by Vishwanath Shetty Date Name Dept Amount Page No 04-01-2021 Akshara Shetty MBBS18-19 10,00,000 16 In the Student s Affidavit is part of Assessee s Paper book No. 1 (Page No. 37 38), Ms. Akshara Shetty mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by her voluntarily. Observation of AO in Para 7.6 of Page No. 12 of the assessment order Mr. Dilip Kumar has encircled the balance amount of 25 lakh in pen and has written 10 lakhs over it. After payment of 15lakh using NEFT, the due amount is 10 lakhs. Later on, Mr. Dilip Kumar encircled the balance of 10 lakhs in pencil and recorded pd to v.s in pencil. However, when we were verifying the copy of seized material (As per page 129 of paper book No. 1) this 10,00,000 is not encircled. Which means it is not paid. However, assessing officer has concluded Rs.10,00,000 is encircled . Ankit Malligarjun Hudalogi Our Remarks for above loosesheet S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Encircled Rs.25,00,000 in pen written Rs.19,00,000 over it in pen. Rs. 19,00,000 encircled in pen and written Rs.15,00,000 over it in pen. Rs.15,00,000 encircled and written Rs.10,00,000. This Rs. 10,00,000 encircled in pencil written Nil over it in pencil. In pencil written Rs.10L Pd to K.V.S but It was not mentioned that it was paid in cash. 2 Fees due amount for 2020 not mentioned 35e6 Krishna Priya Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 23-12-2020 Krishna Priya M.K MBBS18-19 10,00,000 16 In the Student s Affidavit is part of Assessee s Paper book No. 1 (Page No. 70 71), Ms. Krishna Priya H K mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by her voluntarily. Shivaprakash P Remarks for above loose sheet SL.No. Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 Page no 8 Shivaprakash P MBBS 201819 12,50,000 1 Rs. 12,50,000 was due on 25-072020 348 Encircled Rs. 12,50,000 in pen and written Rs.7,50,000 over it in Pen. But this Rs. 7,50,000 was not encircled. In right side mentioned B 5L RTGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hravan Kumar Shetty MBBS 2018-19 12,50,000 1 Rs 12,50,000 Given due on 25-07-2020 348 Encircled 12,50,000 in pen. In right side mentioned RTGS dt 14-09-2020 ** 83840 but amount received through RTGS was not written. 2 Rs 12,50,000 was due on 25-072020 350 Encircled 12,50,000 in pen. In right side mentioned RTGS dt 14-09-2020 ** 83840 but amount received through RTGS was not written. Hence the total fees due on 25-07-2020 was encircled Balance amount is not written it can be said that total fees is received through banking channel. Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 14-Sep Shravan Kumar Shetty MBBS 18-19 12,50,000 10 In the Students Affidavit is part of Assessee s Paper book No. 1 (Page No. 92 93). Mr. Shravan Kumar Shetty mentioned he has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by him voluntarily Suha Suman AV Noting as per A/AJIMS/06-Written by Dileep Remarks for above loose sheet SL. No. Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 Page no 10 Suha Suman AV MBBS 2018-19 5,00,000 1 Rs. 25,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Year Amount Point No Remarks as per A/AJIMS/06 Page no 12 Aishwarya Arvind MBBS 2019-20 20,00,000 1 As per Dilip Rs.20,00,000 was due on 25-07-2020 circled in pen and Rs. 10,00,000 written above it in pen 258 In right side Rs 10L RTGS dt 06-012021 xx2459 written in pen. Nil as per V.S 02-02-2021 written in pencil. Rs 10,00,000 not encircled. Near this 10L pd nil is written in pencil. Banking channel payment Rs.10,00,000 only written. 2 Rs.10,00,000 was due on 25-07-2020 circled 262 Right side written in pen as Rs 10L RTGS dt 06-01-2021xx2459 , that means Rs.10,00,000 paid via banking channel Same neft details which is given in page no.258 was written here, which means this Rs. 10,00,000 is part of the above Rs.20,00,000 which is already been discussed. Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 2-Dec Aishwarya Aravind MBBS 19-20 10,00,000 8 07-01-2021 Aishwarya Aravind MBBS 19-20 10,00,000 16 In the Student s Affidavit is part of Assessee s Paper book No. 1 (Page No. 35 36), Ms. Aishwarya Arvind mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is part of Assessee s Paper book No. 1 (Page No.78 79), Ms. Nibina Nisar mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by her voluntarily Panchami Remarks for above loose sheet SLNo Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 Page no 15 Panchami MBBS 2019-20 30,00,000 Rs. 15,00,000 was due on 25-12-2020 250 Encircled Rs. 15,00,000 in pen. In right side written F. Tr dt 05-012021 xx217953 . Transfer amount not written. Hence the total fees due on 25-072020 was encircled The balance amount is not written here so it can be said that total fees is received through banking channel. Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 8-Sep Panchami MBBS 19-20 30,00,000 10 In the Student s Affidavit is part of Assessee s Paper book No. 1 (Page No.80 81). Ms. Panchami mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by her voluntarily Richa Kumari Remarks for above loose sheet SL No Name of the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 418 Right side written in pencil 10L Pd as per V. Shetty As per V.S -Nil but its not mentioned that it was paid to Vishwanath Shetty and also its no mentioned that it was paid in cash. 2 Rs. 10,00,000 was due on 20-052020 420 In Right side written in Pencil as per V Shetty - Nil Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 07-09-2020 Dr Nithin H.S G.M 18-19 10,00,000 10 19-12-2020 Dr Nithin H.S MP G18-19 10,00,000 16 In the Student s Affidavit is part of Assessee s Paper book No. 1 (Page No. 59 60), Dr. Nithin HS mentioned he has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by him voluntarily. Akhil S Plackiel Remarks for above loose sheet SL. No. Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 Page no 19 Akhil S Plackiel PG 2018-19 14,00,000 Rs. 11,00,000 was due on 20-05-2020. 412 . Amount circled in pen. . In right side written in Pencil RTGS Rs. 20L Dt. 28-08-2020 . In right side written in Pen 11L RTGS Dt 22-09-2020 XX9931 . Hence the total fees due on 25-072020 was received through banking channel. Noting as per A/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 19-20 10,00,000 10 21-12-2020 Dr Karthik B.A MPG19-20 20,00,000 16 In loose sheets A/AJIMS/06 Rs.20,00,000 written where as Mr. Vishwanath Shetty written Rs.30,00,000. There is mismatch no details have been obtained. In the Student s Affidavit is part of Assessee s Paper book No. 1 (Page No. 51 52), Dr. Karthik BA mentioned he has not paid any amount of fees in cash to the management. Also in the said affidavit student has affirmed that said declaration in the affidavit is given by him voluntarily. Kaveesh S Shetty Remarks for above loose sheet SL No Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 Page no 22 Kaveesh S Shetty PG 2019-20 5,00,000 Rs. 50,00,000 was due on 20-05-2020. 66 Circled Rs. 50,00,000 in Pen, written Rs. 15,00,000 above in pen. Circled Rs. 15,00,000 and written Rs. 10,00,000 above in Pen and its not circled. In right side written in pen Rs. 35L RTGS Dt 05-11-20 ICICI Br 850165, Rs. 5L RTGS 02-02-2021 XX6956. In Pencil Written as By PM Jan 2021(21/1/21) Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 16-Oct Dr Kavish Shetty Ortho PG 19-20 5,00,000 12 In the Student s sworn statement dated 14-03-2022 is repro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Page no 25 Nikitha Nagesh PG 2019-20 15,00,000 1 Rs. 25,00,000 was due on 20-052021. Fees due for 2020 details not given here. Fees payment details not given. 46 2 This is same details given here which is given in Page No. 46. 54 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 30-Nov Dr.Nikitha Nagesh MPG 19-20 15,00,000 8 In the Student s Affidavit is part of Assessee s Paper book No. 1 (Page No. 57 58), Dr. Nikitha Nagesh mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by her voluntarily. Chidrawar Yogendra Prakash Noting as per A/AJIMS/06-Written by Dileep 4 Dr. Chidrawar Yogendra Prakash M.Ch Urology MGT 2000000 20.09.2021 9763498189 9822994489 (F) 9423901443 (M) Remarks for above loose sheet SL No Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 Page no 26 Chidrawar Yogendra Prakash PG 2019-20 15,00,000 Rs. 20,00,000 was due on 20-092021. Fees due for 2020 details not given here. Fees payment details not given. 44 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 22-Oct Dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 500000 25.07.2023 Remarks for above loose sheet SL. No Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 Page no 29 Arjun Venugopal MBBS 2019-2020 12,50,000 Rs. 25,00,000 was due on 20-05-2021. Fees due for 2020 details not given here. Fees payment details not given. 256 260 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 03-Dec Arjun Venugopal MBBS 19-20 12,50,000 8 In the Student s Affidavit is part of Assessee s Paper book No. 1 (Page No. 41 42), Mr. Arjun Venugopal mentioned he has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by him voluntarily. III THIRD ADDITION RS.1,23,50,000/- in respect of 9 students is as follows: Sr. No. Name of the students Batch Year Cash paid for their fee on year 2020 1. Adya P Shenoy MBBS 2017-18 12,50,000/- 2. Rasmitha R MBBS 2017-18 12,50,000/- 3. Saiyed Maria Imtiyaz MBBS 2017-18 12,50,000/- 4. Bhaskar Gorala PG 2017-18 8,00,000/- 5. Vangara Sushmita PG 2018-19 30,00,000/- 6. Mohd. Ashar EK PG 18-19 2,50,000/- 7. Kaushik Raju PG 2019-20 20,00,000/- 8. Shaludeen MBBS 19-20 23,00,000/- 9. Musi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 Page no 4 Bhaskar Gorla PG 2017-18 8,00,000 Rs. 5,00,000 was due on 15-08-2020. Fees payment details not given. 308 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 15-Oct Dr Bhaskar Gorla MPG 17-18 8,00,000 12 He completed course in the year of 2020 and we are not able to contact him. However, Vishwanath shetty said he has written wrong amount. Vangara Sushmita Remarks SL. No Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 5 Vangara Sushmita PG 2018-19 30,00,000 This Student details not found Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 21-Oct Dr Vangara Sushmitha OBG 18-19 30,00,000 12 In the Student s Affidavit is part of Assessee s Paper book No. 1 (Page No. 66 67), Dr. Vangara Sushmitha mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by her voluntarily. Mohd. Ashar EK Remarks SL.No Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 6 Mohd. Ashar EK PG 2018-19 2,50,000 This Stud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not found Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 13-11-2020 Musin Farook MBBS 14-15 3,00,000 8 In the Student s Affidavit is part of Assessee s Paper book No. 1 (Page No. 77), Mr. Musin Farook mentioned he has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by him voluntarily. Yaswanth Goud 24. Dr. Yaswanth Goud General Medicine 1500000 20.05.2020 9912139696, 984971687, 7702868818 24. Dr. Yaswanth Goud General Medicine 1500000 9912139696, 984971687, 7702868818 Remarks for above loose sheet SL No Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 Page no 1 Yaswanth Goud PG 18-19 27,00,000 1 Rs. 15,00,000 was due on 25-05-2020. 418 Circled Rs 15,00,000 in pencil and above written Nil in pencil. but amount not written. Details of payment in cash not written. In right side written '' time given upto 27-01-2021 in pencil'' 2 Fees due amount not mentioned. 420 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 07-11-2020 Dr Yashwanth Gowda MPG18-19 12,00,000 8 01-01-2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial marked as A/AJIMS/02, it can be seen that the student paid the amount of Rs. 3 lakhs to Mr. Vishwanath Shetty. The student has paid 20 lakhs through RTGS and Mr. Dilip Kumar has maintained the pending fee of 17 lakh for the year. It means that the student has paid the amount of Rs. 3 lakhs in cash. 5.5 Further, the assessing officer issued notice to all the 43 parties who said to be paid unaccounted fees to the assessee. Out of the 43 students, following persons numbering 35 filed affidavit confirming that they have not paid any unaccounted fees to the assessee: 1 Kunwar Rahihikmat 2017-18 Affidavit Assessee s Paper book No. 1 (Page No. 72 73). Page No 116 of Paper book No 1 Paper book page no.06 2 Lekha Bhat 2017-18 Affidavit Assessee s Paper book No. 1 (Page No. 74). Page No 117 of Paper book No 1 07 3 Shashank D Raghavan 2017-18 Affidavit Assessee s Paper book No. 1 (Page No. 89) Page No 118 of Paper book No 1 08 4 Akshara Shetty 2018-19 Affidavit Assessee s Paper book No. 1 (Page No. 37 38) Page No 118-119 of Paper book No 1 09-10 5 Kadeejath Shanifa Farveen 2018-19 Affidavit Assessee s Paper book No. 1 (Page No. 68 69). Page No 121 of Paper book No 1 12 6 Krishna Priya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee s Paper book No. 1 (Page No. 41 42). Page No 142-143 of Paper book No 1 38 27 Adya P Shenoy 2017-18 Affidavit Assessee s Paper book No. 1 (Page No. 31 32). Page No 143 of Paper book No 1 39 28 Rasmitha R 2017-18 Affidavit Assessee s Paper book No. 1 (Page No. 82 83). Page No 143-144 of Paper book No 1 40 29 Saiyed Maria Imtiyaz 2017-18 Affidavit Assessee s Paper book No. 1 (Page No. 85 86). Page No 144 of Paper book No 1 41 30 Vangara Sushmita 2018-19 Affidavit Assessee s Paper book No. 1 (Page No. 66 67). Page No 145 of Paper book No 1 43 31 Mohd. Ashar EK 2018-19 Affidavit Assessee s Paper book No. 1 (Page No. 55 56). Page No 146 of Paper book No 2 44 32 Kaushik Raju 2019-20 Affidavit Assessee s Paper book No. 1 (Page No. 53 54). Page No 146 of Paper book No 1 45 33 Shaludeen 2019-20 Affidavit Assessee s Paper book No. 1 (Page No. 87 88). Page No 147 of Paper book No 1 46 34 Musin Farook 2015-16 Affidavit Assessee s Paper book No. 1 (Page No. 77). Page No 148 of Paper book No 2 47 35 Roshan V Shetty 2019-20 Affidavit Assessee s Paper book No. 1 (Page No. 84). Page No 149-150 of Paper book No 1 50-51 5.6 The following persons confirmed in the sworn statement before authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lips which contain only the details for follow-up action to be made and thus, there was no conclusive evidence to suggest any unaccounted collection of fees. In our opinion, the addition cannot be made only on the basis of statement recorded u/s 132 (4) of the Act from the assessee s employees and the basis of unsubstantiated confession statement. Further, the Chairman Mr. Alake Janardhan Shetty (aged 80 years old) in all his statements recorded u/s 132 (4) of the Act on 17.2.2021, u/s 131 of the Act on 12.8.2021 23.9.2021, u/s 132 (4) of the Act 24.9.2021 has categorically stated that the Trust does not collect from students any unaccounted fees and no cash has been handed over to him. Further, it is also admitted fact that there was a physical cash of Rs. 53,00,750/- which was the cash balance appearing in the books of accounts of the assessee as on the said date on 17.2.2021. Being so, the said cash balance is duly explained and it cannot be treated as unaccounted physical cash found during the course of search. The addition cannot be made only on the basis statement recorded u/s 132 (4)/131 of the Act with unsubstantiated documents or loose slips found during the course of sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is an undisputed fact that the statement recorded under Section 132 (4) of the Act has better evidentiary value but it is also a settled position of law that addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the content of the statements. 21. In the case of Kailashben Manharlal Chokshi v. CIT, the Gujarat High Court held that the additions could not be made only on the basis of admissions made by the assessee, in the absence of any corroborative material. The relevant paragraph no. 26 of the said decision has been reproduced hereinbelow: - 26. In view of what has been stated hereinabove we are of the view that this explanation seems to be more convincing, has not been considered by the authorities below and additions were made and/or confirmed merely on the basis of statement recorded under section 132 (4) of the Act. Despite the fact that the said statement was later on retracted no evidence has been led by the Revenue authority. We are, therefore, of the view that merely on the basis of admission the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in proceedings under the Act, as specified under Section 132 (4) of the Act. Nonetheless, such statements alone, without any other material discovered during the search which would corroborate said statements, do not grant the AO the authority to make an assessment. 24. Coming to the findings of the ITAT with respect to incriminating material in the case of M/s Pavitra Realcon Pvt. Ltd and M/s Delicate Real Estate Pvt. Ltd, it is seen that the ITAT has explicitly held in paragraph no. 18 that no addition has been made on the basis of any incriminating material found during the course of search. Further, the ITAT relied on the decision of the Supreme Court in the case of CIT v. Sinhgad Technical Education Society1 and held as follows: - 18. Further, while writing the order it has come to our notice that the Hon ble Apex Court in the case of Sinhgad Technical Education Society has held that section 153C can be invoked only when incriminating materials assessment year-wise are recorded in satisfaction note which is missing here. Therefore, the proceedings drawn u/s 143 (3) as against 153C are invalid for want of any incriminating material found for the impugned assessment year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the AO would not be justified to assess income in case no incriminating material is found during the search. The relevant paragraph is reproduced herein below: - 54. In any case, Abhisar Buildwell, in our considered opinion, is a decision which conclusively lays to rest any doubt that could have been possibly harboured. The Supreme Court in unequivocal terms held that absent incriminating material, the AO would not be justified in seeking to assess or reassess completed assessments. Though the aforesaid observations were rendered in the context of completed assessments, the same position would prevail when it comes to assessments which abate pursuant to the issuance of a notice under Section 153C. Here too, the AO would have to firstly identify the AYs' to which the material gathered in the course of the search may relate and consequently it would only be those assessments which would face the spectre of abatement. The additions here too would have to be based on material that may have been unearthed in the course of the search or on the basis of material requisitioned. The statute thus creates a persistent and enduring connect between the material discovered and the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncept of a block assessment. A block assessment in search cases undertaken in terms of the provisions placed in Chapter XIVB was ordained to be undertaken simultaneously and parallelly to a regular assessment. Contrary to the scheme underlying Chapter XIVB, Sections 153A, 153B and 153C contemplate a merger of regular assessments with those that may be triggered by a search. On a search being undertaken in terms of Section 153A, the jurisdictional AO is enabled to initiate an assessment or reassessment, as the case may be, in respect of the six AYs' immediately preceding the AY relevant to the year of search as also in respect of the relevant assessment year , an expression which stands defined by Explanation 1 to Section 153A. Of equal significance is the introduction of the concept of abatement of all pending assessments as a consequence of which curtains come down on regular assessments. B. Both Sections 153A and 153C embody non-obstante clauses and are in express terms ordained to override Sections 139, 147 to 149, 151 and 153 of the Act. By virtue of the 2017 Amending Act, significant amendments came to be introduced in Section 153A. These included, inter alia, the search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. E. The reckoning of the six AYs' would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs' would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in 281 CTR 241 has held that not giving opportunity of cross-examination makes the entire proceedings invalid and nullity. The Co-ordinate Bench of the Tribunal in the case of Best City Infrastructure Ltd. (supra) has also held that not providing opportunity of cross-examination makes the addition invalid. It has come to our notice that the Hon'ble Delhi High Court recently has upheld the said decision as reported in 397 ITR 82. 31. On this aspect, it is beneficial to refer to the decision of the Supreme Court in the case of Andaman Timber Industries v. CCE9, wherein, it was held that not providing the opportunity of cross-examination to the assessee amounts to gross violation of the principles of natural justice and the same will render the order passed null and void. The relevant paragraph of the said decision is extracted herein below: - 6. According to us, not allowing the assessee to cross-examine the witnesses by the adjudicating authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1969 SC 198 : (1969) 1 SCR 317 : (1969) 1 SCJ 543] that the rules of natural justice are not embodied rules and in the same case this Court approved the following observations from the judgment of Tucker, L.J. in Russel v. Duke of Norfolk [(1949) 1 All ER 109] : There are, in my view, no words which are of universal application to every kind of inquiry and every kind of domestic tribunal. The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth. Accordingly, I do not derive much assistance from the definitions of natural justice which have been from time to time used, but, whatever standard is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case. [Emphasis supplied] 33. Further, the argument of learned counsel for the Revenue that this mistake is curable under Section 292B of the Act lacks merit as the plain language of the said Section makes it abundantly clear that this provision condones the invalidity which may arise merely by mistake, defect or omission in notice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestigate against the Sahara and Birla Groups in the alleged payoff scandal. The factual setting of the case are that, a search was conducted by the CBI in the premises of Birla Groups, as a result of which, certain incriminating materials and an amount of Rs.25 crores were recovered. CBI referred the matter to Income Tax Department. In another search, the IT department recovered certain incriminating materials and unaccounted money of Rs.135 crores from Sahara Group of Companies. Allegedly the department recovered certain print out of excel sheets showing that Rs.115 crores were paid to several public figures. The settlement commission granted immunity to the Sahara Group of Companies on ground that the scrutiny of entries on loose papers, computer prints, hard disk, pen drives, etc. have revealed that the transactions noted on documents were not genuine and have no evidentiary value and that details in these loose papers, computer print outs, hard disks and pen drives, etc. do not comply with the requirement of the Indian Evidence Act and are not admissible evidence. The Income Tax Settlement Commission has also observed that department has not been able to make out a clear case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee or in the premises of M/s Navaratna Estates, having given loan to Sri Anil Kumar to the extent of Rs.1,05,00,000/-. In the search proceedings in the residence of Shri Anil Kumar also, no evidence with regard to unaccounted investment or expenditure representing the loan supposed to be taken from the assessee was found. Merely on the basis of the statement given by Shri Lanka Anil Kumar, which was subsequently retracted, the AO made the addition on the presumption that the assessee had advanced the sums to Shri Lanka Anil Kumar without bringing any evidence on record. The AO has neither given opportunity to the assessee to cross examine the third party nor disproved the explanation given by the assessee. As found from the order of the AO Sri Lanka Anil Kumar is an employee of M/s Navaratna Estates and drawing the salary of Rs.25000/- per month. He explained that the sums mentioned in the whatsapp messages were related to the amounts given to Sri Lanka Anil Kumar in the range of Rs.5,000/- to Rs.10,000/- to meet the petty cash and miscellaneous expenses. No evidence was found with regard to the investment made by Shri Anil Kumar in his own business out of the loans stated to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Venkateshwar Rao Vs DCIT ITA 25/825/Vizag/2012. The ratio laid down is that solely on the basis evidences such as notings in loose sheets found with third parties and the statement of third parties, additions cannot be made without corroborative evidences and independent enquiries. Applying the above ratio to the facts of the case, it is held that the addition made is not warranted, the same is deleted. 6.1. No evidence was found by the department to establish that assessee has given loans to Shri Lanka Anil Kumar during the course of search and no evidence was found regarding utilization of purported advances by Shri Lanka Anil Kumar. Shri Anil Kumar also subsequently retracted from the statement and clarified that he has not received any cash loans from the assessee. Addition was made merely on the basis of whatsapp messages and the statement recorded from section 132 (4) from Shri Lanka Anil Kumar which was subsequently retracted. Therefore we are of the view that the addition made by the AO is unsustainable and the Ld. CIT (A) rightly deleted the addition. Accordingly, we do not see any reason to interfere with the order of the Ld. CIT (A) and the same is upheld. The appeal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon ble Supreme Court in the case of Andaman Timber Industries (supra) quashed the assessment order on the reason of not providing cross-examination of witnesses whose statements were recorded. 5.18 The Hon ble Supreme Court in the case of Mehta Parikh Co. v. CIT, 30 ITR 181 held as under:- In the instant case a mere calculation of the nature indulged in by the ITO or the AAC was not enough, without any further scrutiny, to dislodge the position taken up by the assessee, supported as it was, by the entries in the cash book and the affidavits put in by the assessee before the AAC. The Tribunal also fell into the same error. It could not negative the possibility of the assessee being in possession of a substantial number of these high denomination currency notes. It, however, considered that it was impossible for the assessee to have had 61 such notes in the cash balance in their hands on 12-1-1946, and then it applied a rule of the thumb treating 31 out of such 61 notes as within the bounds of possibility, excluding 30 such notes as not covered by the explanation of the assessee. This was pure surmise and had no basis in the evidence, which was on the record of the proceedings. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utralised as a witness what remains is the accounts, vouchers, challans, bank accounts, etc. But, we would observe here that which way lies the truth in Shri Sukla's depositions, could have been revealed only if he was subjected to a cross-examination by the assessee. As a matter of fact, the right to cross-examine a witness adverse to the assessee is an indispensable right and the opportunity of such cross-examination is one of the corner-stones of natural justice. Here Shri Sukla is the witness of the Department. Therefore, the Department cannot cut short the process of taking oral evidence by merely having the examination-in-chief. It is the necessary requirement of the process of taking evidence that the examination-in-chief is followed by cross-examination and re-examination, if necessary. 9. It is not just a question of form or a question of giving an adverse party its privilege but a necessity of the process of testing the truth of oral evidence of a witness. Without the truth being tested no oral evidence can be admissible evidence and could not form the basis of any inference against the adverse parties. We have also examined the records and we find that this Shri Sukl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till remains the question of estimation of the profit. The assessee no doubt has given a comparative instance of gross profit rate but it is also necessary for the Department to come to a finding as to the norm of the gross profit on the basis of comparative cases. Therefore, it is the duty of the Assessing Officer to counter the comparative statement cited by the assessee before he can have the option to estimate the gross profit. Again, it is the comparative instance that alone can be the foundation of such estimate in case the accounts are really found to be unreliable and requiring to be rejected. Therefore, in the interest of justice for both the parties, the assessee and the Revenue, it is necessary for us to direct the Tribunal to remand the case to the Assessing Officer for reconsidering the whole matter in the light of the observations made by us in the foregoing and redo the assessment accordingly. All opportunities should be given to the assessee in order to lead any evidence that the assessee may feel necessary to rebut the case against him. As a result we decline to answer the question. 5.20 As held by the Hon ble Calcutta High Court in the above judgment, in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violation noticed by the State authorities and also Medical Council of India. In such circumstances, it is not possible to conclude on the basis of various loose sheets and jottings found during the search action u/s. 132 that assessee has collected unaccounted fees from students. 5.23 Further, the Bangalore Bench in the case of Anand Social Education Trust in ITA Nos. 2542-2548(B)/2017 dated 29.05.2020 by placing reliance on the judgment of Hon ble Madras High Court in the case of Balaji Educational Charitable Public Trust, 56 taxmann.com 182 in similar circumstances observed that the AO had not conducted any enquiry with the students or parents or others. The cash seized during the search was accepted as not belonging to the assessee. There was no complaint received from any student or parent regarding unaccounted fee charged by the institution. In the above case also the AO had estimated the unaccounted fees received from the students under the management quota for various years. The Hon ble Madras High Court held it to be a perverse inference. Further the Tribunal observed the AO had only drawn certain inference on surmises and conjectures. He did not conduct any independent e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... college. We are aware that entire evidence has to be appreciated in a wholesome manner and even where there is documentary evidence in favour of an assessee, the same can be overlooked if there are surrounding circumstances to show that the claim of assessee is opposed to normal course of human thinking, conduct and human probability. Even applying this principle to the present case, we have difficulty in rejecting the assessee s plea as opposed to normal course of human conduct. The circumstances surrounding the case are also not enough to reject the assessee s explanation. We have considered all the material on record and also the statement of the parties as discussed in the earlier paragraphs. We are of the opinion that the department cannot rely on those statements, more so when it was confronted to the assessee s employees during cross-examination, they have denied the collection of unaccounted fees. The department failed to collect proper information from any source corroborating collection of unaccounted fees, except un-corroborating entries in the loose sheets. It is also supported by the following observation of assessing officer in the impugned assessment order: No corro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) was that extra tuition fees was collected by Mr. Balachander on his own and society has nothing to do with extra tuition fees collection. Being so, the Tribunal held that the assessee cannot be faulted and approval cannot be withdrawn so as to deny the benefit of section 11 of the Act. The relevant observations of the Tribunal are as follows:- In this regard, the ld. counsel for the assessee brought to our notice that the agreed tuition fee which the Society can collect for admission has also been collected and this is duly reflected in the statement found in the seized documents. It was submitted that the total collections in the form of DD was a sum of Q 1,16,74,975 and the amount stated to have been deposited by the Secretary in the Head Office is only a sum of Q 80,000 on 02.06.2005 and Q 14,33,500 on 19.10.05. It was submitted that the reference in the seized document might be with regard to the normal tuition fee which the society can collect. It was submitted that the entries in page 54 cannot be conclusive to show that the Secretary was also involved in collecting the ETF. We are of the view that the submissions made on behalf of the assessee in this regard appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of search, excel sheets were found containing the names of students, names of parents and the amount. In the course of search and, thereafter, statements of chairman of the assessee trust were recorded on a number of occasions, with reference to the entries in these excel sheets. It was explained that circumstances in which the excel sheets were found were not ascertainable. It was contended that uncorroborated notings in the excel sheets should not be acted upon to derive any inference against the society. In support of this contention that the said excel sheets are not reliable, the learned counsel for the assessee put forth the following reasons : (a) The notings in the excel sheets lacked corroboration of the notings although the Department attempted in that direction. (b) In course of search and post-search investigation, in the statements recorded under s. 132 (4)/131, chairman of the assessee trust, Sri Srinivasa Rao expressed his inability to explain the circumstances in which those sheets were found from the premises of the assessee-society. (c) Despite repeated questioning on various occasions, the said Srinivasa Rao denied that the assessee-society has collected capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the chairman of the assessee, Sri B. Srinivasa Rao in the course of his statement recorded on 17th Dec, 2009. This act on the part of the search party raises an eyebrow. (i) The Dy. Director of IT in course of post-search investigation made extensive enquiries to corroborate the notings in the excel sheets. One of the steps taken by him was that he summoned all the parents of the students under s. 131 to take evidence. In course of assessment proceedings, the assessee made requests to supply the copies of these statements. Repeated requests made by the assessee fell in deaf ears and so far these statements have not been provided. On being directed by the AO in course of assessment proceeding, the assessee contacted the office of Director General of IT and reminded on a number of occasions but no information was supplied, despite the fact that this fact was also brought to the notice of Director General of IT. As a principle, neither the assessee can suppress the best evidence in his possession nor the Department. It is settled principle that whenever the assessee desires, he can have access to all information, whether favourable or adverse to him as laid down in Suraj Mall Moh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the decision of Apex Court in the case of CBI v. V.C. Shukla [1998] 3 SCC 410. Further the presumption in this section is not mandatory. This can supplement but cannot supplant evidence. Nothing was found by the Department to support their suspicion. (m) Therefore, the Excel sheets which are not speaking either by itself or in the company of others, or corroborated by enquiry, cannot be the basis of any inference that capitation fees were collected and not entered in the accounts to cancel registration. 5.31 Thus, it is seen from the seized material and Excel sheets that these are handwritten loose documents and undisclosed income of the assessee cannot be determined on the basis of these documents. There is no direct evidence or conclusive evidence to prove the collection of the unaccounted fees. The statements of parties of whosoever is relied upon are evasive replies given to the revenue authorities on the basis of which the AO made an estimate of collection of fees. This is only based on conjectures and surmises and only on circumstantial evidence. The AO failed to established the live link between the seized material and the unaccounted fees which resulted in creation of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otes in the diary/loose sheets are required to be supported by corroborative material. Since there was no examination or cross-examination of persons concerned, the entire addition in the hands of the assessee on the basis of uncorroborated writings in the loose papers found during the course of search cannot be sustained. The evidence on record is not sufficient to uphold the stand of revenue that assessee is collecting huge unaccounted fees in the guise of carrying on educational activities. 5.33 Being so, in our opinion the seized material relied by the assessing officer for sustaining addition is not speaking one in itself and also not speaking in conjunction with some other evidence with authorities found during the course of search or post search investigation. Thus, the well settled legal position is that a non-speaking document without any corroborative material, evidence on record and finding that such document has not materialised into transactions giving rise to income of the assessee which had not been disclosed in the regular books of accounts of the assessee has to be disregarded for the purpose of assessment to be framed pursuant to search and seizure action. In thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to have been paid unaccounted fees, 35 students denied the same in affidavit, 5 denied in their sworn statement and whereabouts of 3 students were not known. No efforts has been done to find out their whereabouts. 5.37 Further, some of the statements have been recorded under section 131 by the authorized officer subsequent to completion of search and these statements cannot be considered as conclusive evidence in view of the below mentioned CBDT Circular in file no.286/98/2013-IT (Inv.II) dated 18.12.2014 which states as under: Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessees were coerced to admit undisclosed income during Searches/Surveys conducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole and officers concerned in poor light. 2. I am further directed to invite your at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w; (iii) The expression such other materials or information as are available with the Assessing Officer contained in Section 158BB of the Income-tax Act, 1961, would include the materials gathered during the survey operation under Section 133A; (iv) The material or information found in the course of survey proceeding could not be a basis for making any addition in the block assessment; (v) Finally, the word may used in Section 133A (3) (iii) of the Act, viz., record the statement of any person which may be useful for, or relevant to, any proceeding under this Act, as already extracted above, makes it clear that the materials collected and the statement recorded during the survey under Section 133A are not conclusive piece of evidence by itself. A survey was conducted in the premises of the assessee-firm. One of the partners in his sworn statement offered an additional income of Rs.20 lakhs for the assessment year 2001-02 and Rs.30 lakhs for the assessment year 2002-03. However, the said statement was retracted by the assessee-firm in its letter dated August 3, 2001, stating that the partner from whom a statement was recorded during the survey operation under section 133A, was new t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax [(2003) 263 I.T.R. 101]; iii. The word may used in Section 133A (3)(iii) of the Act, viz., record the statement of any person which may be useful for, or relevant to, any proceeding under this Act, makes it clear that the materials collected and the statement recorded during the survey under Section 133A are not conclusive piece of evidence by itself. iv. Finally, the statement recorded by the Assessing Officer on various dates u/s 132 (4) or u/s 131 cannot be the basis to sustain the addition since it is not supported by corroborative material. 5.42 In our opinion, the Assessing Officer has made the addition only on the basis of sworn statements of the various parties backed by unsubstantiated loose slips/excel sheets, which cannot be basis for addition on that reason that it is uncorroborated as discussed above. 5.43 Further, on the date of search action on 6.8.2015, the search party found physical cash of Rs. Rs. 53,00,750/-. This has been compared with the books of account on the date of search and it was observed by ld. AO that this has been tallied with the same. Being so, it cannot be said any unaccounted cash was unearthed during the course of search action. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
